TD unit named in Ponzi lawsuits

…TD is accused of making “false verbal statements to investors,” providing “false and misleading documents,” actively concealing the fraud and “acting in concert” with Mr. Rothstein. Florida media reports, based on depositions given by bank employees in the bankruptcy proceeding for Mr. Rothstein’s law firm, have said he was treated as a “VIP customer” at a Fort Lauderdale-area branch, and some times used a bank conference room for meetings.

The Globe and Mail
June 9, 2010

TD unit named in Ponzi lawsuits
Florida lawyer sentenced to 50 years in $1-billion scheme
Jeff Gray

ScottRothstein.jpg

This artist's rendering shows Scott Rothstein, right, his attorney Marc Nurik, centre, assistant U.S. district attorney Lawrence LaVecchio, left, and U.S. District Judge James I. Cohn, top, in Fort Lauderdale, Fla., Wednesday, June 9, 2010. AP

Florida lawyer Scott Rothstein, who pleaded guilty to bilking investors of more than $1-billion (U.S.), was sentenced to 50 years in jail for his role in a massive Ponzi scheme.

His sentence, handed down Wednesday, came just days after U.S. authorities auctioned off his multimillion-dollar collection of luxury sports cars and his 87-foot yacht. But it is by no means the end of the fight over his ill-gotten gains – and one of Canada’s largest banks is caught up in the mess.

Toronto-Dominion Bank’s U.S. subsidiary allegedly played a “crucial and pivotal role” in the fraud, according to civil lawsuits filed in Florida by investors who lost millions.

None of the claims have been proven in court. Neither the bank, nor any of its employees, have been charged in the case. TD denies the allegations.

“We strongly deny any suggestion that the bank acted improperly or participated in any wrongful conduct in the Rothstein matter,” bank spokesman Rebecca Acevedo said in an e-mail.

“Any legal matter will be resolved by the courts. Through the legal process, the facts will prove that the bank did not conspire with Mr. Rothstein and/or his firm. TD Bank will defend against all such unfounded claims.”

Mr. Rothstein fled to Morocco last October but returned to the U.S. to plead guilty. Prosecutors say his scheme involved false bank documents and the selling of fake lawsuit settlements to investors.

For example, according to court documents, Mr. Rothstein told investors that a plaintiff in a sexual harassment case would sell the settlement with him to receive the money up front, instead of by instalments. But the plaintiffs, and the lawsuits, did not exist.

Bill Scherer, a lawyer in Fort Lauderdale who has filed a lawsuit in state court on behalf of investors who lost $113-million, said the case is a kind of “mini-Madoff,” referring to the massive Ponzi scheme of Bernard Madoff, who pleaded guilty to a $65-billion fraud, for which he was given a 150-year sentence.

While Mr. Scherer expects some money to be recovered from Mr. Rothstein, his lawsuit aims to recoup lost cash from a list of others, including TD, where hundreds of million of dollars flowed through accounts controlled by Mr. Rothstein.

“There’s a lot of money that’s going to be recovered,” Mr. Scherer said in a telephone interview. “But there’s still going to be a hole. There’s going to be a big hole. To the extent that co-conspirators were involved … they’re going to help fill that hole.”

In a civil lawsuit filed in May by Texas-based Coquina Investments, TD is accused of making “false verbal statements to investors,” providing “false and misleading documents,” actively concealing the fraud and “acting in concert” with Mr. Rothstein.

Florida media reports, based on depositions given by bank employees in the bankruptcy proceeding for Mr. Rothstein’s law firm, have said he was treated as a “VIP customer” at a Fort Lauderdale-area branch, and some times used a bank conference room for meetings.

http://www.theglobeandmail.com/report-on-business/td-unit-named-in-ponzi-lawsuits/article1598445/?cmpid=rss1


Brought to you by WikidFranchise.org

Risks: Badge of Authority persuasive technique, Bernard Madoff-type scheme, Conspiracy, Conspiracy to commit fraud, Credence goods: taking advantage of the innocents, Fraudster lawyer, Fraudster banker, Knew, or could have reasonably been expected to know, Lawsuit is frivolous, without merit and will defend vigorously, Money laundering, Ponzi (pyramid) scheme, Self-regulating professionals does not protect consumers, TD Canada Trust, Towers of gold, feet of clay, Weapons of Influence: Authority, United States, 20100609 Td unit

Unless otherwise stated, the content of this page is licensed under Creative Commons Attribution-ShareAlike 3.0 License